Member Info for January24

E121,
I think that you will find that all respected analysts see Brent POO at $100+ during 2022 and 2023. Please see romaron's post/link earlier @ 14.06.
I will add one - Fransisco Blanch at bank of America
https://www.youtube.com/watch?v=NP4khc_RT5U&t=310s

Most of these experts see POO at a trading band of $100 - $140 , I don't see a recession halting the shortage of supply. As for demand, Indeed when the US has to buy to replace the SPR in October it will make matters worse. As for demand destruction, history shows us it takes time and very high prices ( $140 + ) for a long period to do this.
Enquest having POO at $100+ for 2022 will transform the company's valuation. I see the balance sheet showing a NAV of just under $1b at H! results ( in September) and near to $1.5b by year end results (in March). Transforming our valuation, Market Cap and thus Share Price - IMHO

I think that is AB's way of sending us a message " I'm with you lads, the party is on the horizon "
I notice KO also baught this morning too !
KO also sent us a message - " Better get some more quick before the price goes up".
I hear both of you. Sadly I can't join you as every penny I have is already invested in Enquest shares.

In response to KO's comment that H1 ends in 10 days. The results for H1 come out very early September.
Traveling, so only have Fag Packet calculations, so here goes for H1;
Production 50kbpd average for H1. Total production for the 6 months works out at 9m barells.
Hedges ceiling $78 , POO for year todate average $103. Mean average price for Enquest equates $90.
Therefore 90 x 9 = Revenue for H1 $810m.
Now I remember my figure for total costs - Capex, Opex, Decom, Interest etc etc came in at $820m for the year ÷ 2 = 410m for 6 months.
810m revenue minus 410m expenditure = 400m profit.
It's approximate but should be very very close to reality. What's interesting is it looks like we will make the same profit in the first 6 months of 2022 as we did in the whole year in 2021.
That should add at least 22p to our valuation in the weeks after H1 results. ! SP now circa 28p - plus 22p equals 50p by year end ! Anyone for Enquest cake ? Looks like it will have cherries on the top.

Pelle,
The 2021 P&L includes the revenue that Enquest received from it's realised oil price ( from memory $68 , please double check in 2021 results). The P&L for 2021 then causes changes to the previous balance sheet creating a new adjusted balance sheet for 2021.
I am saying the POO affects the P&L which effects the balance sheet, which effects the NAV. Indirect link.

Pelle,
My 60p and Your 80p level will come in the future when the market can see that valuation. In my opinion the market will need to see an NAV of $800m - $1b minimum to give that sort of valuation (Mcap).
I think this is what JS was eluding too at the AGM.
I am not sure that it is possible, but I am more positive than ever about our future.

Romaron,
XXxx

Pelle,
No oil price assumptions at all. The $520m NAV is actual figure as of 31/12/21 year end. The oil price was the actual oil price that Enquest received in for Oil in 2021. It is from actual revenue.
All is in the balance sheet.

Romaron,
I understand your thoughts , however I do believe that our last published NAV is a key reason why our share price is not 60p,80p or £1 today. The NAV is like a Magnet , you can't get a MCap much more than double your NAV. The algos will make allowances for POO and other news. The market does not know what ENQ is worth today, it is guessing until the next set of results are published, then it will adjust.
That's why our share price started to climb, because we told the market in Feb that we paid off a chunk of debt. It began it's climb. Then at the end of Feb , POO shot up and we continued our climb. The market is guessing what we are worth all the time.
H2 results will show our NAV will rocket higher. Currently $520m. I think we should be close to $1,000m ($1b) come September H2 results. The share price (valuation) will follow, it will rocket higher. IMHO.

Summary
This form of valuation, while being accurate for the date it was calculated, does not give any value to future profits or future assets value increases. It is purely a valuation "snapshot". However it does go some way to explain our "low valuation", because I believe the market will value above NAV ( i.e. it will give some value to future increases in assets) but will use NAV as an anchor. The market will not value much above Your last NAV without proof of revaluation. I.e. a new set of official results confirming that your aasets have increased and or your liabilities have fallen. H2 should begin to sort this out for us.

NAV per share is $0.18 as at 31/12/2021 - last number at the bottom.
Obviously we have added much value to this number during 2022. Indeed we should have doubled this figure by end June. 2022.

Good morning Pelle,
Regarding NAV,
I was refering to Assets (excluding intangables, like goodwill etc) minus Liabilities = NAV.
Indeed Pelle, you can find an example on this website LSE. Look above my post, click on Enquest Fundermentals and scroll down to balance sheet. The NAV per share is at the bottom. On this site they show Us at $520m nav. Hope this helps.
All the best.
JAN

Yes, it was mentioned that he was leaving in the summer..

Romaron the PE bit was John saying he thought it was a poor measurement of valuation. We discussed NAV Net Asset Value as a better measurement of valuation.
Now this is very interesting as our current NAV is just over 500m. Almost the same as our MCap. So he may be onto something.

Sorry I am shopping with my wife.
Yes, second subject was valuation (Share price). John believed that paying the debt down was key to increasing equity for shareholders. Indeed he believed the effect would be greater than dividend payments and share buy backs. That explains why debt at 0 5 is so key for Enquest. Although he did not confirm, I see share buy backs and dividends coming in 2023. As for our poor valuation then I agree with John now ( I argued against it quoting US/Canadian valuations) Our true valuation will begin to show itself when our debt target is achieved.
JAN
Very annoyed as wife is buying clothes she does not need.

Hi romaron,
Great to meet you yesterday. enjoyed it !
Yes, my talk with John Sweeney covered 2 subjects;
First was raising capitol for new projects. John felt that the pool of funding options open to oil company's was going to be limited going forward. Indeed he thought oil company's would have to likely self fund going forward. Either individually or as a collaboration.
Second subject was valuation of UK oil company's. Why so low.

Yes KO, good to meet you too.
Been talking to you for 6-7 years on here. Maybe next time we can have a pint.

Great to meet fellow investors at the AGM.
As KO mentioned it was a positive meeting. Quick summary of "chit chat" official and while having coffee before and after.
- Debt down to 0.5 is No1 objective.
- Looking at possibility of Dividends and share buy backs. Both mentioned but no dates or decission yet !
- Hedging, looking at all options including "pure putts". Capping dowside leaving upside free. But has a cost circa $5 per barrel.
- Enquest Producer, confirmed had received "actual offers" (sounds like more than one) however looks like none accepted yet as we coud be keeping it for something !
Maybe I will remember more later, as I had a beer with Ron and Steve after, which was nice ! going for a lie down as tired.
Summary - Very Positive AGM.

Cheers Spin,
Though won't need it ! Sorry I won't sit in your Citroen C5 either. Too cheap and tatty !
Driving from Sunny Suffolk to Colchester Station 45 minutes. 1st Class Train to Liverpool Street 45 minutes.
Romaron is then picking me up in the Limo !
See you there !

P.S. Any "Pie and Mash" shops near the Wool Exchange ?

POO retracing to support lines.
Current pull back before move to $130 to re-test yearly high. Expecting re-test of $130 within the next 3 weeks max. The question is - will the yearly high level hold or will we see new yearly highs for POO ?
My guess is that $130 will hold this time, but will break at the next attempt during August while we are all on holiday. That's when I expect to see $140 . IMHO.

Well done KO,
See you there.